Landlord and Rental Property Insurance in New Jersey
A rental home needs a different policy than the home you live in, and New Jersey law sets a minimum liability amount for most landlords. Stonebrook insures rental homes, two-families, basement apartments and small multi-families across Lakewood, Ocean and Monmouth counties, and larger buildings through our commercial team.
Reviewed by Nate Feuerman, High Net Worth Insurance Producer at Stonebrook
Last updated
Quick answers
What insurance does a rental property need?
Usually a dwelling fire policy, most often a DP-3, which covers the building, lost rent and landlord liability.
Does New Jersey require landlords to carry liability insurance?
Yes. Under P.L.2022, c.92, most rental owners must carry at least $500,000, or $300,000 for an owner-occupied home of four or fewer units.
Does my homeowners policy cover a basement apartment I rent out?
Not automatically. Tell your carrier about every rental unit, because an undisclosed unit can create problems at claim time.
What is loss of rents coverage?
It replaces the rent you lose while a covered loss makes the unit unlivable.
What landlord insurance covers.
Rental homes are usually insured on a dwelling fire policy. The DP-3 is the broadest version and the one we use most.
Dwelling
The rental building, insured for what it would cost to rebuild. Stonebrook’s 2026 guideline is about $250 per square foot as a starting point.
Other structures
Detached garages, sheds and fences on the rental property.
Landlord’s property
Appliances, furniture and equipment you provide to tenants or use to maintain the property.
Fair rental value
The rent you lose while the unit can’t be lived in after a covered loss.
Landlord liability
Injuries to tenants and visitors caused by the property’s condition, such as a broken step or an icy walk.
Water backup and more
Water backup, ordinance or law, and equipment breakdown for heating and hot water systems.
New Jersey requires landlord liability insurance.
Under P.L.2022, c.92 (N.J.S.A. 40A:10A-1 and 40A:10A-2), the owner of a rental unit must carry liability insurance of at least $500,000 per occurrence for combined bodily injury and property damage.
The owner of a multi-family home with four or fewer units, one of which the owner lives in, must carry at least $300,000.
Owners must register the certificate of insurance with their municipality every year. Towns can charge a filing fee and fine owners who don’t comply between $500 and $5,000.
We issue the certificate you need for your town, and we can add an umbrella above the required limit.
What to tell us about your rental.
- Every unit, including a basement apartment.Carriers price and cover by the number of units. An undisclosed unit is one of the most common causes of claim disputes.
- Who lives there.Owner-occupied, long-term tenants, family members, or short-term guests. Short-term rentals often need different coverage.
- How it is owned.If the property is in an LLC, the LLC should be the named insured, with you listed as needed.
- The building’s age and systems.Roof, heating, electrical and plumbing updates affect which carriers will write it.
- What the lease requires.We recommend requiring tenants to carry renters insurance.
Matching the policy to the property.
| Your situation | Usual policy | Notes |
|---|---|---|
| You live in one side of a two-family | Homeowners (HO-3), with the rental unit disclosed | Some carriers prefer a dwelling policy. The $300,000 minimum applies. |
| You rent out a single-family home | Dwelling fire (DP-3) | Add loss of rents and landlord liability. |
| A rental with a basement apartment | Dwelling fire (DP-3), all units disclosed | Ask about water backup and code compliance. |
| Five or more units, or a mixed-use building | Commercial property and liability | Handled by our commercial team. See multi-family insurance. |
| Short-term or vacation rental | A policy that allows short-term rental | Many standard policies exclude it. See vacation homes. |
Stonebrook is an independent insurance agency.
We don’t work for one insurance company. We work with more than 25 carriers, so we can compare landlord coverage across carriers instead of selling you a single company’s policy.
Since 1982 we have helped New Jersey families from our office in Lakewood, and we place coverage in all 50 states through our carriers and partners. When something changes, or when you have a claim, you call people who know you.
Coverage that works together.
Most families need more than one policy. Here is how the pieces fit.
Landlord insurance questions, answered.
What kind of insurance does a rental property need?
Most one- to four-family rental homes need a dwelling fire policy, usually a DP-3, with landlord liability and loss of rents. Owner-occupied two-families can sometimes stay on a homeowners policy with the rental unit disclosed. Buildings with five or more units usually need commercial coverage.
Does New Jersey require landlords to have liability insurance?
Yes. Under P.L.2022, c.92, most rental owners must carry at least $500,000 of liability per occurrence, and owners of an owner-occupied home with four or fewer units must carry at least $300,000. Owners must register the certificate of insurance with their municipality each year.
What is a DP-3 policy?
A DP-3 is a dwelling fire policy for rental and non-owner-occupied homes. It covers the building on an open-perils basis, meaning everything not specifically excluded, and can include loss of rents and landlord liability.
Does my homeowners policy cover a basement apartment I rent out?
Not automatically. You need to tell your carrier about the rental unit, and some carriers will require a different policy. An undisclosed rental unit can lead to a denied or reduced claim.
Does landlord insurance cover my tenant’s belongings?
No. Your policy covers the building and your own property. Tenants need their own renters insurance, which many landlords require in the lease.
What is loss of rents coverage?
Also called fair rental value, it replaces the rent you lose while a covered loss makes the unit unlivable, so your mortgage and expenses are still covered during repairs.
Can I insure a rental property owned by an LLC?
Yes. The LLC should be the named insured on the policy, and we will make sure the liability and certificate reflect the correct owner.
Does landlord insurance cover Airbnb or short-term rentals?
Often not. Many standard landlord and homeowners policies exclude short-term rental activity. Tell us how the property is used so we can place the right coverage.
Where do I register my certificate of insurance?
With the municipality where the rental is located, usually through the town clerk or the code enforcement or rental registration office. We provide the certificate; your town tells you its filing process and fee.
Let’s make sure your rentals are covered, and compliant.
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